The Secrets to Making Your Money Work for You – Introduction
One of the most globally recognizable books of all time is Robert Kiyosaki’s Rich Dad, Poor Dad. The book gives a tale between two fathers. One is an educated father who values education so much. He insists that his son must work hard at school so that they can get a stable job.
The other dad is not educated. He is however street smart. He insists that his son must not pass exams or get a good job. Instead, he teaches his son to be street smart. To find opportunities where other people don’t.
A major lesson from the second dad is on letting money work for you, instead of working to get money. He believes that people who work and toil every day for money are often unhappy and unproductive.
We can say the same about traders. Traders who work really hard to become successful often miss the point of trading. This is because, they spend so much time reading and doing unproductive things. For example, many of them will spend their days reading about hundreds of technical indicators. This is unnecessary because what matters in trading is to find a few indicators that work.
Personally, I like using less than 4 technical analysis indicators. I use the RSI and Stochastic to find overbought and oversold positions, Fibonacci Retracement to find the support and resistance levels, Moving Averages and ADX to find the strength of the trend. Of course, you can find and use your ideal indicators.
As a trader or investor, it is very possible to make your money work for you.
- The first way is to do this is to understand how to identify and follow a trend. In this, your goal is usually to identify areas with significant reversals and then start positions. Then, you should work to get into the trades during this time and ride the momentum. A good way to find these reversals is to use technical indicators like ADX and RSI. Another common method is to use the popular Elliot Wave indicators to identify key areas.
- The second method is to find opportunities early. One area this has proven to be true is on the cryptocurrencies category. Many people have made millions of dollars by just identifying the early potential of cryptocurrencies as the anti-central bank currency. The same is true in stocks. For example people who identified the disruptive capabilities of Google and invested have seen significant returns. The same is true with companies like Facebook and Microsoft. Therefore, to make money work for you, you need to identify opportunities early.
- Third, you must be willing to get out of your comfort zone and be willing to take risks. Again, in cryptocurrencies, I believe that people who made initial purchases of these currencies were often laughed at. But, are the people who laughed at them laughing now? In other words, you must be willing to be an outlier. If you believe or are convinced that something will be great, take calculated risks.